The dollar rose in early trading in London on Friday, in light of the assessment of statements issued by Federal Reserve officials, which indicate continued tightening in monetary policy, after US inflation data this week suggested that the Fed may slow down the pace of raising interest rates.
US inflation data came less than expected, which led to support for high-risk assets, such as stocks, and led to the dollar’s decline, as markets interpreted the data as an indicator that will prompt the Federal Reserve to calm the tightening in monetary policy, but Fed officials have made it clear that they will continue to tighten .
On Thursday, San Francisco Federal Reserve Chair Mary Daly said she was open to the possibility of raising rates by another 75 basis points in September, to combat very high inflation.
By 07:44 GMT, the dollar index rose 0.2 percent on the day to 105.28 points, after incurring losses for four days, which made it destined to record a weekly decline of 1.2 percent.
The Japanese yen fell against the dollar's strength, as the US currency rose 0.3% against the yen to 133,345.
In a note to clients, Paul McKeill, global director of currency research at HSBC, said he believed the Fed needed more evidence of slowing core inflation to calm its tightening of monetary policy.
Sterling fell 0.3 percent to $1.2175, after being unaffected by data that showed Britain's gross domestic product fell less than expected in June.
The euro fell 0.2 percent to 1.0295 dollars.
The data showed that inflation in France rose by 6.8 percent on an annual basis in July, while the inflation rate in Spain was 10.8 percent, the highest since 1984.
The euro was affected by the troubles facing Europe due to the Ukraine crisis, and the search for alternative energy sources, and the German economy was affected by the lack of rain.
In a new problem, a drop in the water level of the Rhine, Germany's commercial artery, has disrupted shipping and raised its costs more than fivefold.
The New Zealand dollar rose on expectations that the Reserve Bank of New Zealand will raise interest rates next week.